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Monday, September 18th 2006

Insured?

Why, despite people like Mathew Holt jumping up and down and shouting “Doctors Suck!“, people don’t see physicians as the villians in this healthcare mess – because there are still insurance companies.

Shortly after Selah’s medical bills hit $20,000, Blue Cross stopped covering them and eventually canceled her coverage retroactively, refusing to pay for treatment, including surgery the insurer had authorized in advance.

The company accused the Shaeffers of failing to disclose in their coverage application an undiagnosed bump on Selah’s chin and physician visits for croup. Had that been disclosed, the company said in a letter, it would not have insured Selah.

The Shaeffers say they weren’t trying to hide anything. When they applied for coverage, Selah did not have a tumor, at least as far as they — or any physician — knew. The doctor visits occurred after Leslie filled out the paperwork, and they seemed routine, the Shaeffers say. They believe Blue Cross was looking for any excuse to dump their daughter and dodge her bills.

Cancellations such as Selah’s are fueling a new backlash against health plans. In a series of recent lawsuits, policyholders say they were illegally terminated, causing substantial financial hardship and jeopardizing their healthcare. State regulators are investigating and said they were preparing to take action against Blue Cross.

Aside from appealing to the company that dumped them, subscribers’ only recourse is to complain to state regulators or sue. After an insurer yanks coverage, it can be difficult, if not impossible, to get a policy from another carrier.

Inexcusable. The evidence for a pre-existing condition or fraud on an application for insurance has to rise above what it appears to in this particular case. Regulators need to slap Cali’s BC/BS into shape in this case. Traditionally media coverage such as this has a good rate of success in forcing insurance companies’ hands, for those few lucky families who get it.

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